Traditional, non-Internet auction processes for heavy equipment typically involve a four-step process. First, the potential bidder travels to the auction site. Next, the potential bidder inspects the items to be auctioned. In most cases, the bidder personally inspects the item or finds and hires a qualified inspector. Once the item's condition is determined, the bidder develops a bidding strategy. Finally, the potential bidder physically bids at the auction site in hopes of buying the item below the assessed price. The potential bidder's total expense for the item includes the time invested; travel to and lodging at the auction site; the cost of the inspector; the price paid for the item; and, equipment transportation cost from the auction site to the bidder's desired location.
The seller's process and costs in the pre-Internet traditional auction process are similar. The seller normally has equipment inspected to find major deficiencies and items that should be fixed prior to sale. The bidder hopes that the seller has the proper ethics to properly fix items and not conceal any deficiencies. Potential bidders like to see the seller's technical inspection, but the seller rarely provides this inspection to the bidder. The seller's total expense includes the time invested; travel to and lodging at the auction site; transportation for the item to the action site; initial inspection and preparation of the equipment; and, the risk that the equipment is not sold.
In general, Internet auctions increase product exposure and increase the bidding pool. A bidder in Japan for example, can bid on an item in Texas against a bidder in New Jersey. This process works satisfactory for small dollar items or new items procured from the manufacturer. Used items, particularly, expensive items such as used heavy equipment, motor vehicles, and the like, add significant risk to the bidder because the seller establishes the item's description and condition.
The advantages of going to a traditional Internet auction site must be weighed against the risk that the inspection process is eliminated. Internet auction sites attempt to deal with this problem by providing past sales experiences and comments from previous buyers on the seller, or holding the transaction funds in escrow until the buyer is satisfied. Internet auction sites do not offer inspections or assurances to bidders on the equipment offered on their sites. This risk naturally affects the bid price, which results in selling items at lower prices for the seller and a higher degree of dissatisfaction with potentially misrepresented equipment condition.
The purpose of Internet auctions is to provide better markets, better prices, reduced costs (travel to sites), and in general, a more satisfactory and cost effective way to conduct auction business. However, the lack of an impartial third party inspection system to provide quality control to the auction process hinders the full potential of the Internet auction. What is needed in the art is an efficient Internet auction market with an impartial third party inspection system. The present invention fulfills this and other needs.